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12/12/2010 4:00PM

Think Before You Give

'Tis the season of giving but before you make that donation to your favorite charity there are some pitfalls you want to avoid. Kelsey Hubbard talks with WSJ's Shelly Banjo for the WSJ Wealth Advisor Report.

This transcript has been automatically generated and may not be 100% accurate.

I ... to see if it ... did a ... before you donate your favorite charity there are some pitfalls one Avoid ... to your generosity doesn't turn you into grants ... I'm Kelsey Hubbard and joining me is Shelly Banjo for The Wall Street Journal for the special report for the wealth advisor at Wall Street Journal and silliness so many people are looking to give at the time of the year ... to charity ... and a lot of times they give cash but sometimes they give stocks a which may be watching out for a faster to say you think you buy this stock and it may be hands on a shot up in the past couple months ... the feud but if you try to donate a stock that ... you haven't held for more than you're ... not to get to do that and that growth in the stock so let's take it down into numbers so if you have ... I buy the stock to thirty dollars each it's up to fifty other a couple months ... us out seeking at the high handed action ... led analysts to tell the from barrier you're going and get that deduction on ... the thirty dollars ... and the same thing on the same thing applies when you're selling stock that you've had a loss on ... deal one and done in a stock that you actually had a loss I really wanna do is ... sell the stock cash and a loss and many ... donate that money to charity that way you get the income that income tax deduction and a new also dead at ... a loss and to carry for your Kaplan gains tax ... should be key to make eighty year really taking advantage of all the tax breaks are ... open to you when you're doing and I think that ... there are sometimes more than just want exactly any and every every type of situation you wanna look at how how many different ways can I can take advantage of this charitable deductions ... and a lot of people wanna donate to charity and think it's a great thing but a lot of ... people don't realise that some of these charities are actually been ... sharing some any information on their donors to whether people need to now before they get ... thousands and thousands of charities actually sell their donor less so they sell all of your information to third party vendors and marketers and ... then you can end up on a list are getting a phone call and ... I can I get high and mighty men up on this lesson that's because Yukari selling that information ... to the first thing I do is ask the charity ... or outlook on their website to see if they have a privacy policy ... and the other thing you and you is you have to say that a lot of cherries I wanna opt out from anything like that so even if they do have a privacy policy ... we need to actually be proactive and say I don't wanna be a penny less and you know what some people get ... cash stock to talk about and also to get some ... valuable assets like a painting or work of art ... but that it gets tricky Timothy what you can guiding people may not realize that when they meet another ... well they will also continue to maintain a piece of valuable property your art ... on particularly our work is they need to be done and for its intended purpose so for example if you bought a painting at three hundred thousand dollars an hour ten years later its five hundred thousand dollars if you give it to a school that isn't really to use the painting ... after its intended purpose of displaying art ... and the EU not to get that full deduction you only get what he stands on it ... he gets a museum that the whole purpose untenable mission is to use that painting ... a meal can afford ... to have agreed to an awesome quickly another thing people should keep in mind if they're serving ... on the board of charities were being trustees of charities when they need to know for big and small charities alike it's a great honor to serve on a board that the problem is to also ... add me to be held liable for any of the charity's mistakes and missteps ... that so important to look into the insurance side directors and officers insurance is what is called ... in to see and make sure that you're covered in case the charity ... gets into any trouble typing them to thinking ... and reading anymore Shelley's Tips to Avoid layer DVD charities added the beest dot com and look for the Wealth Adviser Special Report ... I'm Kelsey Hubbard for The Wall Street Journal digital network ... noon The ...